Describe what an accountable care organization (ACO) is

ACOs can generally be defined as a local entity and a related set of providers, including at least primary care physicians, specialists, and hospitals, that can be held accountable for the cost and quality of care delivered to a defined subset of traditional Medicare program beneficiaries or other defined populations, such as commercial health plan subscribers. The primary ways the entity would be held accountable for its performance are through changes in traditional Medicare provider payment featuring financial rewards for good performance based on comprehensive quality and spending measurement and monitoring. Public reporting of cost and quality information to affect public perception of an ACO's worth is an-other way of holding the ACO accountable for its performance. Proponents generally view three ACO characteristics as essential. These characteristics include: (1 ) the ability to provide, and manage with patients, the continuum of care across different institutional settings, including at least ambulatory and inpatient hospital care and possibly post-acute care; (2 ) the capability of prospectively planning budgets and resource needs; and, (3 ) sufficient size to support comprehensive, valid, and reliable performance measurement".